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Industry and Trade
THE manufacturing industries continued to perform well in 1988 but, due to slackening demand overseas for Hong Kong products, growth was slower than in 1987. The value of domestic exports during the year grew by 11 per cent to $217,664 million, compared with 27 per cent growth in 1987.
Overall, the major factors that contributed to Hong Kong's success as a leading manufacturing and commercial centre continued to work well. Among these are a simple tax structure, a flexible and industrious workforce, a modern and efficient seaport with one of the world's leading container ports, a centrally-located airport with a computerised cargo terminal, excellent world-wide communications, and the government's commitment to free trade and enterprise.
Manufacturing industries are an important component of the Hong Kong economy, accounting for some 22 per cent of the gross domestic product and 32 per cent of total employment. It is estimated that up to 90 per cent of Hong Kong's manufacturing output is eventually exported. The shortage of usable land has generally constrained diversifica- tion into capital and land-intensive industries. Light manufacturing industries, producing mainly consumer goods and operating in multi-storey factory buildings, predominate. About 69 per cent of the total industrial workforce is employed in the textiles, clothing, electronics, plastic products, electrical appliances, and watches and clocks industries. These industries together accounted for 74 per cent of Hong Kong's domestic exports in 1988.
Notwithstanding the concentration in light manufacturing, there has been a continuous process of up-grading of quality and product range. Many new and sophisticated product lines have been introduced and many simpler ones abandoned, partly because of external competition and partly in response to demand in Hong Kong's established markets.
Trade
1,
As from 1988, Hong Kong and a number of its major trading partners have adopted a new international system of trade classification, known as the Harmonised Commodity Coding and Description System (the Harmonised System). The United States will adopt the new system on January 1, 1989. Implementation of the new system was closely monitored to ensure it would have no adverse effect on Hong Kong's external trade.
On the multilateral front, the pace of the Uruguay Round of multilateral trade negotiations under the General Agreement on Tariffs and Trade (GATT) intensified during the year. Together with other like-minded participants, Hong Kong advanced its views on a number of important subjects including tariffs, non-tariff measures, textiles, dispute settlement, safeguards, trade-related intellectual property rights and services. In December 1988, Hong Kong also took part at the GATT Ministerial Meeting held in Montreal to review progress in the first two years of the negotiations and to impart new political impetus to the ongoing negotiations.